African Americans Are Making Slow Progress in Closing the Racial Gap in Investments

A new study from the FINRA Investor Education Foundation finds that African Americans continue to be underrepresented among investor households in America, despite modest gains in recent years. The generation of wealth can be a major factor in creating greater opportunities for accessing top-quality higher education.

Researchers examined investment account ownership across more than 80,000 households of differing racial and ethnic backgrounds over a six-year period. They found only about a quarter of African American adults owned a taxable investment account, and more than half owned no investments of any kind. However, the proportion of African Americans owning taxable investment accounts increased from 22 percent to 26 percent from 2012 to 2018. Some 35 percent of White Americans had taxable investment accounts.

“These findings confirm the presence of a stark, persistent racial and ethnic divide among U.S. investors,” said FINRA Foundation President Gerri Walsh. “We know that systemic racism — evident in disparities in income and wealth — poses significant barriers that can impede the financial inclusion of African American households.”

The full study, “Bridging the Divide: A Closer Look at Changes in the Racial and Ethnic Composition of Investor Households,” may be accessed here.

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